US Fines Deutsche Telekom's Hungarian Subsidiary

By Josh Smith

Fresh off its failed attempt to sell T-Mobile to AT&T, Deutsche Telekom and a Hungarian subsidiary have agreed to pay the U.S. Justice Department millions to resolve corruption charges.

The German telecom company has been having a rough time with U.S. regulators. Earlier this month Deutsche Telekom gave up on its blockbuster deal to sell T-Mobile to AT&T after Justice Department lawyers went to court to block it.

Magyar Telekom and its parent company, Deutsche Telekom, will pay a nearly $64 million criminal penalty, the Justice Department said on Thursday.

Most of the payment will be shouldered by Magyar, which was accused of using bribes and other inappropriate measures to prevent Macedonian officials from liberalizing their country's telecommunications system. The company was also accused of underhanded deals in Montenegro.

Deutsche Telekom was fingered for failing to accurately record and report Magyar's activities, according to a Justice statement. The Justice agreement notes that the companies decided to disclose the violations, and to take steps to fix the problem.

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In a statement on Thursday, Magyar said it "remains fully committed to responsible corporate behavior."

Magyar also paid more than $31 million to settle related U.S. Securities and Exchange Commission charges.

Deutsche Telekom owns about 60 percent of Magyar, the largest telecom company in Hungary.

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